Journal Star parent company “on verge saving itself from bankruptcy”
Today’s issue of the Wall Street Journal says Lee Enterprises — the Lincoln Journal Star’s Iowa-based corporate owner — is “on the verge of bankruptcy, foiling a group of its debt holders betting on a default.”
According to the WSJ, Lee has about $1 billion worth of debt (or six times its earnings) and has “long been high on the list of potential bankruptcies” but is preparing to sell junk bonds that would enable it to pay off its obligations and “give it a new shot at survival.”
The WSJ says “what is good news for the company has thwarted the plans of a flock of ‘vulture’ investors… which have been buying Lee’s loans.” The group was betting Lee would default and they could turn their holdings into an ownership stake, giving them access to the company’s assets (newspapers).
“Lee’s demise looked so inevitable that some of the investors even conferred two months ago to discuss the most favorable ways to restructure the company,” the WSJ reported. Lee took on most of its debt when it bought the Pulitzer chain of newspapers, led by the St. Louis Post-Dispatch, at precisely the wrong time.